Treasury backs rural fuel discount

The Government is “determined” to win EU approval for a scheme which offers a 5p-a-litre discount on the price of petrol and diesel to be extended to the most rural parts of England, a senior Minister has said.

Chief Secretary to the Treasury Danny Alexander told MPs he is “keen” for the fuel discount scheme which is being piloted in Scottish Islands and the Isles of Scilly to be extended to people living in other remote areas who also face huge fuel bills.

The 5p-a-litre discount scheme was launched in the islands earlier this year in recognition of the high cost of petrol and diesel in such areas, and the lack of public transport available.

The Yorkshire Post is campaigning for the discount to be extended to the most rural parts of Yorkshire, where hard-pressed motorists face similar problems.

Writing in this newspaper in July, David Cameron said that “work is under way for rural Yorkshire to be made another pilot for the fuel discount”, and he hoped “we will see plans progress swiftly”.

Such schemes are classed as state aid by the EU, however, and so require approval by Brussels.

So far, fuel discounts have only been approved for small island communities around Europe.

The Government said in last week’s Autumn Statement that it will “consider ways” to move forward with a discount for rural parts of the British mainland.

Speaking in the Commons, Mr Alexander – whose Scottish constituency includes the ski resort of Aviemore – made clear his determination to push ahead with the plan.

“As a Highland MP, I know the burden that fuel costs can place on people in remote areas,” he said. “That is why we are piloting the fuel rebate scheme for motorists on the Scottish islands and the Isles of Scilly.

“I am keen to push for EU approval for an extension of the scheme to other remote parts of the country that display similar characteristics. Of course that will be a long and difficult job, but I am determined to gather evidence to support the case.”

Mr Alexander said the Government was now working with councils in rural areas to gather the evidence needed to justify the discount – but warned it could be a lengthy process.

“To win the argument at European level for an extension of the scheme, we must pass the same test and provide the same evidence to justify including such remote areas,” he said.

“We are working with local authorities in various parts of the country to gather evidence to support our case.

“We must take that evidence to the European Commission. If it approves our proposal, it must in turn be approved by all 27 EU member states. There are a number of hurdles and a significant process to engage in to gather evidence.”

His intervention follows George Osborne’s decision last week to scrap a 3p-a-litre fuel duty rise planned for the New Year.

And there was more pre-Christmas cheer for motorists yesterday when three supermarkets announced cuts to their fuel prices.

Asda said that from today it would cut 1p a litre off petrol and 2p a litre off diesel at its fuel stations, meaning motorists will pay no more than 128.7p a litre for petrol and no more than 135.7p a litre for diesel. Sainsbury’s said it would drop its prices by the same amounts, while a reduction at Morrisons will also be up to 1p a litre off unleaded and 2p a litre off diesel.

RAC technical director David Bizley said: “It really is starting to look like Christmas. Not only have we persuaded the Chancellor to scrap January’s 3p-a-litre fuel duty increase, but now supermarkets are making festive travel more affordable.

“An RAC poll found that three-quarters of people plan to drive an average of 260 miles to visit friends or family this Christmas, covering some 4bn miles. So this is good news for them at the most expensive time of the year.”

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